KATHMANDU, Dec 13: Stocks took off with a positive start on Wednesday with the Nepal Stock Exchange (Nepse) index adding more than 2 points in early trading. However, the benchmark index pared its initial gains and wavered throughout the day. Eventually, the index closed flat at 1,141.18 points, posting a marginal gain of 0.08 points.
Following Tuesday's modest dip, Nepse remained unchanged on the day. This shows investors lack conviction regarding the plausible direction of the market in the present context. Market participation also declined on the day as the bourse posted total transactions of Rs 269 million, down from Tuesday's Rs 383 million.
Sectoral indices witnessed mixed performance on the day. Hydropower group led the gaining side, posting gains of over 3 percent. Meanwhile, sub-indices of Finance and Life Insurance groups advanced by 0.61 percent and 0.46 percent, respectively. Sub-indices of 'Others' and Manufacturing & Processing groups also edged slightly higher. In contrast, Hotels stocks came under pressure as reflected by a drop of more than 2 percent in the group's sub-index. Microfinance sub-index followed suit with a decline of 0.67 percent. Similarly, Non-life Insurance, Development Bank and Banking sub-indices also closed the day in red.
In terms of market activity, promoter shares of IME General Insurance Ltd recorded highest turnover of over Rs 48 million. Second on the list was Nepal Bank Ltd with more than Rs 34 million worth of shares traded. Other banking scrips, including Nepal Investment Bank Ltd and NMB Bank Ltd, registered turnovers of Rs 16 million and Rs 15 million, respectively. Shares of Nepal Life Insurance Company, Citizens Bank International Ltd and Chilime Hydropower Company Ltd were also traded actively on Tuesday.
Among advances, share price of Chilime Hydropower Company Ltd surged 6.74 percent after the hydropower developer announced 20 percent stock dividend and 5 percent cash dividend to its shareholders. Shine Resunga Development Bank Ltd saw its share price rally by 4.26 percent. Besides, Progressive Finance Ltd, Himalayan Power Partner Ltd and Mahuli Samudayik Laghubitta Bittiya Sanstha Ltd added over 3 percent each on their share prices.
However, Citizens Bank International Ltd turned in the worst performance of the day following the bank's dividend declaration. The private sector lender announced 3.63 percent bonus shares and 1.63 percent cash payout to its shareholders on Wednesday. Additionally, microfinance scrips came under significant pressure as share prices of NMB Microfinance Bittiya Sanstha Ltd, Civil Laghubitta Bittiya Sanstha Ltd, Nagbeli Laghubitta Bikas Bank Ltd and Mirmire Laghubitta Bittiya Sanstha Ltd tanked by over 3 percent each.
As per ARKS technical analysis, the market formed a doji candlestick in the daily timeframe, indicating indecision prevailing in the secondary market. The market is also showing sign of short-term consolidation around 1,140-point level. If the equity market maintains the current level, it might advance further to around 1,160-point mark. On the contrary, the breach of this support zone may indicate further downfall to 1,120 points.